Reincarnation sets your character's level back to one and reduces your skill exp levels (NOT ranks) by a certain percent based on what rank of reincarnation you use (good for nothing, genius, etc.). Early on, the main use of this is to change and mix character classes, such as turning a tier one fighter into a tier two, or making a blue skull into a green skull so the character has both ice and wind attacks. Keep in mind some class-specific skills like cheerleader's move-ups or geomancer's geo modification abilities are not useable after reincarnation to another class. Similarly, monsters can only use attacks of their own kind (a prinny can't use ghost attacks). However, you keep the ranks of those skills even if you can't use them, i.e. a ghost with a rank 4 bite catcher who reincarnates into a mage to get more spells will still have a rank 4 bite catcher when he becomes a ghost again.
The real purpose of reincarnation is, as you said, stats. I do believe there's a transfer of stats back into your base unequipted stats based on a percentage, but that's one of those "under the hood" math formulas that I'm not aware of. What's more obvious, however, is that each reincarnation gives you more "bonus" stat points. Given that base stats are esentially multiplied by the character's level, a level 40 fighter who had 20 attack at level one is going to be noticably weaker than a level 40 fighter who had 50 attack. Because of this, a reincarnated character is always going to be a little stronger than an equal-level non-reincarnated character with the same equipment. In addition, ranking up their "status" to things like skilled, distinguished, or genius, comes with extra perks, such as more class world attempts.
There's one more important part to consider with reincarnation and that's apptitude. As a class goes up in tiers, its apptitude % increases which is essentially the number that multiplies an equipped item for the character (ie, a 1000 attack sword held by a character with 120% atk apptitude gets 1200 attack). This is of course important for all characters, but it's especially important for "story" characters (ones that can't change classes). Each time a story character is reincarnated all their apptitude stats increase by 5%. This is the only way for them to keep up apptitude-wise with the class and monster characters. Also, due to the fact that reincarnation always costs exactly 100 mana for story characters, this ends up making them potentially much more powerful, or at least easier to make powerful (normal character reincarnation costs more each time you do it).
So, reincarnate often. You'll get to a point quickly in your first play through of the game where a level 1 can become a level 30 in one kill, and your items will make that an easy task, so don't worry about the temporary weakening caused by reincarnation. Hope that helps!
- 10 years ago